Stock Markets have always been an attractive investment option for generations. The first publicly traded company officially in the world was the Vereenigde Oost-Indische or United East India Company. The Amsterdam Stock Exchange founded in 1602 was the first stock exchange in the world. Subsequently, the New York Stock Exchange -1792, London Stock Exchange-1801, and Bombay Stock Exchange-1875 were launched.

The stock markets offer various asset classes like Equity, Fixed Income, Derivatives, Commodities, and Real estate as options for investments. Of all the asset classes Equity can give quicker returns on investments. The stockbroker facilitates the Buy/Sell on the exchange platform and the settlement of Stock/Cash happens subsequently. The brokerage fee is then paid to the stockbroker as their charges.

The introduction of Online Trading Platforms in India has been a step towards offering a seamless experience to Investors. Read on to understand the Benefits of Investment in the Stock Market

  1. Flexibility: The stock market is one of the most flexible places to invest money. There are no limits on investments. The investment can be made starting with a minimum of 1 share with no maximum upper limit. A person can invest based on their financial capability. Best Online Trading Platform in India can also make the process of investing very easy owing to the day-to-day advancement of technology.
  1. Easy Liquidity & Highest Returns: The stock markets provide easy liquidity, as there are generally no lock-in periods. Any need for urgent funds can be realised by liquidating the shares immediately. It has been time and again proven that the stock markets have beaten inflation and have the potential to give remarkable returns in favourable conditions.
  1. Opportunity to be a Stakeholder: The stock markets allow the average person to be a stakeholder in the company whose shares they are holding. This results in the stakeholder reaping corporate action benefits. Additionally, the shareholder has voting rights, which gives them the power to cast their vote and override any policies that may be prejudicial to their interests in an area of concern.
  1. Corporate Action Benefits: Corporate action benefits include Dividends, Rights Issues, Bonus Issues, Mergers & Acquisitions, and Stock-Splits. Corporate Actions can be categorized as Voluntary & Involuntary Corporate Actions. Voluntary Corporate Actions include Rights Issues and Shares buyback. Involuntary Corporate Actions includes Dividends, Bonus Issues, Stock Split, Mergers & Acquisition.

The amount & frequency of dividend payouts reflects on the financial health of the company. The amount received in the form of dividends can be re-invested by the investor into the stock market. Rights issues are shares offered to the existing shareholders at a discounted price. These rights are also transferable and allow the shareholder to sell them in the open market.

Thus, it can be seen that even staying invested in the stock markets gives the holder the benefits of Corporate Actions.

  1. Loan against Securities: Investment in the stock market can prove to be a great help in case of any emergencies. The shares available with an investor can be pledged as collateral to avail loans with banks or institutions. The amount of the loan will depend on the value of the securities offered as collateral.
  1. Securities Lending & Borrowing: Income can be generated from securities lying idle in the account. This mechanism is called Securities Lending and Borrowing and has a rate of interest with a fixed tenure. The lender transfers the shares to the borrower, who either pays cash or transfers shares to the lender as collateral. The borrower pays a collateral fee to the lender.
  1. Regulatory Framework: The Indian Stock Markets are regulated by the Securities Exchange Board of India – SEBI. The institution of SEBI has been formed to safeguard the rights of the investors. With strict emphasis on KYC & Compliance, SEBI has robust mechanisms in place to monitor the movement & performance of the stock market. Hence the chances of any investor being defrauded in the stock market are minimal.

With the progress in Information & technology, most activities of the stock market are being carried out on Online Trading Platforms. The race to be the Best Online Trading Platform in India has a whole lot of contenders Dhanush, by Ashika Group is a comprehensive trading platform. Ashika Group has been in the spectrum of Indian capital markets for over 25 years. Dhanush is a one-stop solution for all your investment needs due to the range of tools and features it offers to users.

Conclusion: The ability of the stock markets to bounce back from crises has been an important story in the modern world. While one can advocate investments in the stock markets for high returns on investments, the pitfalls of wrong judgment calls cannot be discounted. Hence it is always advised to have a strong professional advisor who acts as your guide to safeguard your investments and carry out proper research before making investments.

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